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Higher Tobacco Taxes? was the lead story on the front page of today’s St. Louis Post-Dispatch, describing two proposals to raise the cigarette tax from 17 cents a pack to 40 cents. What is most intriguing is that both are spearheaded by the self-same group, the Missouri Petroleum Marketers and Convenience Store Association, led by Executive Director Ron Leone, that has successfully opposed previous efforts to raise Missouri’s lowest-in-the-nation cigarette tax.
[For a previous blog featuring Ron Leone please click here: 2012-11-07 P-D: “Missouri keeps tobacco tax as the lowest in the nation”]
It transpires that this is being pursued not for altruistic reasons but to head off a potentially larger tax increase if a competing initiative to raise the tax by 50 cents to 67 cents a pack is successful. How marvelously devious.
21 hours ago • By Leah Thorsen
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TOBACCO TAXES IN THE REGION
Missouri’s 17-cent per pack tax on cigarettes is the lowest in the nation. Here’s a look at what Missouri’s neighboring states impose:
Nebraska: 64 cents
Tennessee: 62 cents
Kentucky: 60 cents
Source: Campaign for Tobacco-Free Kids
The latest appeal for an increase in Missouri’s tobacco tax came Monday from an organization that has successfully fought to keep the state’s tax the lowest in the nation.
The Missouri Petroleum Marketers and Convenience Store Association filed two nearly identical versions of an initiative petition seeking a statewide vote to raise the tax on cigarettes to 40 cents a pack.
That’s a 135 percent increase, but it’s less than two other proposals being floated and more likely to win voter approval, the trade group says.
One of the group’s proposals could mean $800 million over a decade to be used for transportation funding, it says. Any measure would require a signature-gathering campaign before going before voters.
Missouri’s current state cigarette tax is 17 cents a pack, the lowest of any state in the nation.
The proposed increase would be phased in, with an additional 13-cent tax per pack going into effect on Jan. 1, 2017; an additional 5 cents on Jan. 1, 2019; and the remaining 5 cents on Jan. 1, 2021.
The group — which fought all three tobacco-tax increases ultimately rejected by voters since 2002 — also is proposing a 50 percent tax increase on other tobacco products.
Under one version, the proceeds would fund transportation. Under the other, the money would go to the state’s general revenue fund.
Ron Leone, executive director of the Missouri Petroleum Marketers and Convenience Store Association, said his group will see which is more popular with voters, but he expects Missouri voters to support the version allocating the extra money to fund transportation projects. He also said it would allow Missouri stores to keep their tax advantage over border states.
A 40-cent tax on cigarettes would keep Missouri’s tobacco tax among the lowest nationwide, topping only Georgia and Virginia, which impose tobacco taxes of 37 cents and 30 cents respectively, according to the Campaign for Tobacco-Free Kids.
He said the hike would be equivalent to a 3-cent hike in the gasoline tax. A measure to increase the state’s fuel tax by 2 cents died this year in the Legislature, and that has caused the state to dial back on transportation spending.
No Missouri Department of Transportation expansion projects, such as new lanes, interchanges or bridges, are planned over the next five years. That represents a first in the department’s history, the result of a bleak funding outlook.
The belt-tightening comes as MoDOT braces for lean years after the death of the fuel tax hike and rejection by voters of a sales tax increase that would have provided about $5.4 billion over 10 years for roads and bridges as well as ports, railways and public transit.
“Would it solve our transportation problems? No,” Leone said of his group’s proposal. “Would it help our problems? Absolutely.”
If successful in collecting enough signatures — a minimum of 157,788 from six of Missouri’s eight congressional districts — a measure would be up for a vote in the November 2016 election. The two initiatives submitted Monday to the secretary of state’s office brings the total to 80.
And Leone’s group isn’t the only one with an idea for where money from a tax-hike on tobacco could go.
Missouri Attorney General Chris Koster, a front-runner for the 2016 Democratic gubernatorial nomination, in Marchcalled for the state to pass a cigarette tax hike to around 90 cents a pack with the money earmarked to fund college scholarships for state students. No such petition has been filed to get that measure on the ballot.
The group Raise Your Hand for Kids has filed its petition and is also pursuing a November 2016 ballot initiative to increase Missouri’s tobacco tax and use the money for early childhood education and health screenings for children ages birth to 5.
The group wants to increase the tax by 50 cents — to 67 cents a pack — to bring in an additional $250 million a year for screening programs, home visits and child care from birth through age 5.
Under the plan, St. Louis County, with the highest population of young children in the state, would gain about $37.5 million in funding. St. Louis would gain nearly $14 million. St. Charles and Jefferson counties would gain $15.7 million and $9.5 million respectively.
But voters have turned down other tax hikes, most recently in 2012 when they were asked to raise tobacco taxes by 73 cents a pack. Nearly 51 percent of voters rejected the plan to raise $283 million for smoking cessation programs, K-12 education and higher education.
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